Presidential Measures to End Fuel Crisis in Yemen

Presidential Measures to End Fuel Crisis in Yemen

Wednesday, 7 March, 2018 - 08:15
A worker with an AK-47 rifle at a petrol station amid the fuel supply shortage in Yemen's capital Sanaa July 26, 2015. REUTERS/Mohamed al-Sayaghi
Sanaa, Aden - Asharq Al-Awsat
In line with the humanitarian operations led by Saudi-Arab Coalition supporting legitimacy, Yemeni President Abd-Rabbu Mansour Hadi ordered the liberalization of oil derivatives market in the country in an effort to end the "fuel crises" that have recently been exacerbated by Houthi militias.

President Hadi also decided to allow traders and companies willing to import oil derivatives in all Yemeni regions, including areas controlled by Houthis. The directive also exempt importers from paying customs taxes for three months.

Saudi Ambassador to Yemen Mohammed Al Jaber praised Hadi's decision, which coincided with the issuance of a decree appointing a director of Yemen Oil Company in Aden.

"The decision coincides with the overall humanitarian operations plan in Yemen and will have a major impact on improving the lives of the Yemeni people and alleviating the suffering imposed by Iranian Houthi militias," Al Jaber said in a tweet on his Twitter account.

Economic observers predicted that the presidential decision would have a positive effect that would eliminate the recurrent crises in the oil market after the process became subject to competition among importers.

Following the president's decision, petrol stations began providing citizens with gasoline and diesel, a day after Houthi militias created a fuel crisis.

The domestic gas crisis still prevails in Sanaa and areas under militias' control in light of the group's rejection to retract its arbitrary measures against traders.

On Tuesday, President Hadi appointed Entissar al-Arashah as General Manager of Oil Company, Aden branch, first woman to take the important executive position in the temporary capital.

During the meeting with the Arashah, Hadi reiterated the importance of the state-owned company, and asked its employees to strive for "market stability, preventing monopoly, providing oil derivatives and preventing fabricated crises."

State-owned news agency Saba reported that President Hadi instructed the government Monday to endorse a free market of fuels and give all firms and traders an opportunity to import and purchase fuels through all Yemeni seaports.

"In reference to the overall humanitarian response operations announced by Saudi-led Coalition for restoring legality, and due to the humanitarian situation our country has been experiencing, as well as easing businesses procedures to bring all basic commodities for the Yemeni people, and reduce prices of necessary commodities including fuels: all necessary measures shall be taken to open fuels market and allow all companies and traders to import and purchase fuels in all Yemeni seaports including the ones in Iran-backed Houthi militia controlled regions," Saba quoted Hadi.

The President emphasized the importance of annulling all constraints that may hinder transport, adding that procedures need to be accelerated in the seaports so that permission period shall not exceed 72 hours, and ports shall be instructed to operate two shifts daily.

The President also ordered the suspension of fuel customs, indicating that all these procedures and measures shall be reviewed after three months.

Over two years ago, Houthis suspended the Oil Company's activity and allowed its loyal traders to monopolize the import of oil derivatives and control the fuel market by imposing high gasoline prices in the legitimate government controlled areas.

Head of the Studies Economic Media Center (SEMC) Mustafa Nasr said in a statement that President Hadi's decision is "a positive step that enhances competitiveness".

Nasr, however, did not rule out the negative effects of the decisions that require treatment through a number of procedures, including imposing conditions for traders to import oil derivatives and ensure the transparency and integrity of licensing procedures.

In his statement, Nasr stressed that it is important to "set standards for the quality of oil derivatives imported by traders and apply clear mechanisms for monitoring and inspecting by the official bodies, as well as compliance with the laws in force in paying taxes and customs."

He also called for fair competition between importers of oil derivatives and meeting the needs of the market which contributes to access to fair prices in accordance with the terms of supply and demand.

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